Keyword: Marpep Risk Index

This index combines two of investing’s long-established and most widely used ratios: the price to earnings ratio and the dividend yield. The MRI is the number you get by dividing the p/e by the dividend yield. Use the MRI to find value between income stocks. Generally speaking, the lower the MRI, the better the value. If you want to buy a bank stock, for instance, the bank with the lowest MRI represents the best value. You should hold some stocks with low MRIs in your portfolio because they help to reduce your risk in market setbacks. The MRI is a useful, investigative starting point. It is not a one-signal, buy-sell index; it should be used in combination with other financial measures–debt load, cash flows and growth in sales, earnings and dividend.